Posted on 03/04/2010 7:02:41 AM PST by TigerLikesRooster
Bankruptcy filings volume in US is still soaring despite economic recovery signs
March 3, 2010 - 4:55am
Bankruptcy filings volume in US is still soaring despite economic recovery signs
As American Bankruptcy Institute data showed, despite good signs of economic recovery consumer bankruptcy filings surged this month compared to a year earlier figures.
Thus the data reflected 14% surge on an year basis. As for the monthly changes, 9% increase from January is represented by 111,693 cases filed last month.
And that financial distress is driving more Americans to file for Chapter 7 bankruptcy, which allows a court to discharge most unsecured consumer debt, including credit card bills.
When a stricter bankruptcy law took effect in 2005, a main target was to require more families to rely on Chapter 13 bankruptcy, which requires filers with regular income to repay debts in full, or in part, over several years. Yet the number of Chapter 13 filings decreased 3% last month from January.
Since the law was changed in 2005, the bankruptcy rate has been increasing every year.
Moreover, business bankruptcy filings are also increasing. Therefore, in February, there were 6,557 business filings, compared to 6,390 a year earlier, according to Automated Access to Court Electronic Records digits.
(Excerpt) Read more at ecommerce-journal.com ...
P!
“Since the law was changed in 2005, the bankruptcy rate has been increasing every year.”
One has nothing to do with the other. Crap writing and editing.
The 2005 law makes it HARDER to file a CH 7, not easier.
Bad writing, worse editing...Bad Santa ;-)
Very true as the 2005 law made personal bankruptcy marginally more difficult. Under the old rules I would expect they’d be far higher still.
At some point, even the sheeple have to see.
I'm wondering what "recovery" these a-holes are continually referring to. They keep mentioning it, despite there being no evidence whatsover to support the contention.
Either the journalists who keep insisting on this "recovery" exist in an alternate reality, or I live in an alternate reality.
What frickin’ recovery signs? These people are absolutely crazy.
It's called drinking the kool-aid. By the gallon.
At least 95% of the people eligible before 2005 were still eligible after 5The new code added a means test which is supposed to determine if you qualify. What most people do not know is that prior to 2005 nearly all bankruptcy courts applied a disposable income test to qualify. The two tests yield essentially the same result.
One key factor in the number of Chapter 7 filings is this: Prior to the housing market collapse, many people filed Chapter 13 bankruptcies in an effort to save the equity in their homes. Today, most of these homes are under water and now people are surrendering their homes to get rid of the white elephant.
I got a McAfee “phishing site” warning when I accessed “ecommerce-journal.com”.
That is because Americans are now so prosperous because of Obama’s economic plan they file bankruptcy just to get rid of the excess wealth. Too much bookkeeping to do.
That is because Americans are now so prosperous because of Obama’s economic plan they file bankruptcy just to get rid of the excess wealth. Too much bookkeeping to do.
That is because Americans are now so prosperous because of Obama’s economic plan they file bankruptcy just to get rid of the excess wealth. Too much bookkeeping to do.
Posted according to the theory that a Big Lie repeated often enough will be believed.
A “consumer economy” is always a bllsht economy that encourages borrowing beyond your means to buy all those toys and goodies... and this is the endgame. Many of these bankruptcies are by people who are walking away from underwater houses. They can pay the mortgage but chose bankruptcy instead
Some states the courts are so busy and chaotic that creditors don’t show up. People are keeping automobiles, nice ones, that they bought via a loan
My guess is 50% of these bankruptcies are people shucking off their “white elephant” homes
There definitely is an advantage in surrendering an upside down home especially since in my state it takes up to a (rent free) before the debtors have to move out. However, most of my bankruptcy clients are filing because they have been very poor and careless at budgeting. Most of these homes are under water because a second mortgage was taken out to pay down credit card debt. Before that they borrowed against their 401(k) accounts to pay down CC debt.
I do a lot of bankruptcy work and am still amazed at the question I am most often asked: "How soon can we get credit cards."
I am flabbergasted!! Just goes to show the mindset of many many people in the US....and we wonder why the goobermint is broke.
If more people simply followed Dave Ramsey's advice, a lot less crap (taxpayer $$$) would be eaten up. I have more CCard credit available than any sane person would use / need. I like keeping them (2) at 0 balance and only use them for online purchases or local durable goods purchases (appliances, furniture, etc). I never let the balances for those bigger ticket items remain longer than 4 months, otherwise, I just do w/o.
I was thinking about the consumer spending figures (spending up slightly) this morning and it suddenly hit me why this may be happening.
My wife and I still both have our jobs, but we have cut back spending considerably. But we sort of went on a binge a few weeks ago. It is like being on a diet and one day you just gotta have ice cream. What I am trying to say is that it is possible that those that still have at least some money and/or credit just got tired of not spending and went on a “binge” and now are either back to it, used all their credit, or all their money.
IOW, this may be a temporary bump followed by more decreases.
>>One has nothing to do with the other.<<
Actually, I think they do. If it is made harder to file bankruptcy, but the bankruptcy rate continues to rise, it would be reasonable to infer that it would be even worse had they not changed the law.
Both stories are true. What we are seeing is the emergence of a Latin American style two-tier society. The surviving business owners, big companies, and government employees are now starting to do better. But a fairly large segment of the former middle class has no prospect of ever getting back to that level of economic success. They will be permanently left behind, due partly to a malicious liberal government (who like them that way) and partly to a major shift in an economy that no longer needs their skill sets. These left-behinds can take government benefits and become Peronista-type chronic complainers. Or they can starve. Doesn't matter either way to the Soros types at the top - they've gotten the fundamental division in American society that they wanted.
The writing's pretty bad.
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